Spirit Realty Capital Inc's Dividend Analysis
Insight into Spirit Realty Capital Inc's Upcoming Dividend and Financial Health
Spirit Realty Capital Inc(NYSE:SRC) recently announced a dividend of $0.67 per share, payable on 2024-01-12, with the ex-dividend date set for 2023-12-27. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's look into Spirit Realty Capital Inc's dividend performance and assess its sustainability.
What Does Spirit Realty Capital Inc Do?
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Spirit Realty Capital Inc is a real estate investment trust primarily involved in leasing properties throughout the U.S. Spirit Realty's core business is acquiring real estate through sale-leaseback transactions in which a tenant will sell their property to Spirit and then lease that same property back from Spirit through a prearranged, long-term agreement. Spirit generates nearly all of its revenue in the form of rental income derived from leasing assets in its real estate portfolio. The vast majority of this portfolio is composed of retail properties. General merchandise companies, casual dining chains, and quick service restaurant chains represent significant amounts of Spirit's rental income. The company's real estate assets are fairly evenly distributed throughout the U.S.
A Glimpse at Spirit Realty Capital Inc's Dividend History
Spirit Realty Capital Inc has maintained a consistent dividend payment record since 2012. Dividends are currently distributed on a quarterly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Spirit Realty Capital Inc's Dividend Yield and Growth
As of today, Spirit Realty Capital Inc currently has a 12-month trailing dividend yield of 6.09% and a 12-month forward dividend yield of 6.13%. This suggests an expectation of increased dividend payments over the next 12 months.
Over the past three years, Spirit Realty Capital Inc's annual dividend growth rate was 1.30%. Extended to a five-year horizon, this rate decreased to -6.10% per year. And over the past decade, Spirit Realty Capital Inc's annual dividends per share growth rate stands at 2.70%.
Based on Spirit Realty Capital Inc's dividend yield and five-year growth rate, the 5-year yield on cost of Spirit Realty Capital Inc stock as of today is approximately 4.45%.
The Sustainability Question: Payout Ratio and Profitability
To assess the sustainability of the dividend, one needs to evaluate the company's payout ratio. The dividend payout ratio provides insights into the portion of earnings the company distributes as dividends. A lower ratio suggests that the company retains a significant part of its earnings, thereby ensuring the availability of funds for future growth and unexpected downturns. As of 2023-09-30, Spirit Realty Capital Inc's dividend payout ratio is 1.51, which may suggest that the company's dividend may not be sustainable.
Spirit Realty Capital Inc's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Spirit Realty Capital Inc's profitability 7 out of 10 as of 2023-09-30, suggesting good profitability prospects. The company has reported net profit in 8 years out of the past 10 years.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. Spirit Realty Capital Inc's growth rank of 7 out of 10 suggests that the company's growth trajectory is good relative to its competitors.
Revenue is the lifeblood of any company, and Spirit Realty Capital Inc's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Spirit Realty Capital Inc's revenue has increased by approximately -2.40% per year on average, a rate that underperforms approximately 66.56% of global competitors.
The company's 3-year EPS growth rate showcases its capability to grow its earnings, a critical component for sustaining dividends in the long run. During the past three years, Spirit Realty Capital Inc's earnings increased by approximately -2.60% per year on average, a rate that underperforms approximately 59.66% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 14.60%, which underperforms approximately 19.03% of global competitors.
Engaging Conclusion
Considering Spirit Realty Capital Inc's dividend payments, dividend growth rate, payout ratio, profitability, and growth metrics, investors should weigh these factors carefully. While the current yield is attractive, the payout ratio and some growth metrics suggest caution. Investors may want to monitor the company's ability to maintain its dividend in the context of its overall financial health and growth prospects. Can Spirit Realty Capital Inc continue to reward shareholders amidst these challenges? GuruFocus Premium users can screen for high-dividend yield stocks using the High Dividend Yield Screener to find more opportunities.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
This article first appeared on GuruFocus.
